This chapter outlines elements of a framework for incorporating employment more centrally in development policy, highlights the potential and limits of multiple growth paths in generating employment, and the importance of policy space in formulating employment-centred development strategies. It discusses the extent to which different patterns of structural change are socially inclusive in terms of their capacity to generate decent employment and improved incomes and wellbeing. An examination of working poor poverty rates within different types of employment also draws out the likelihood that workers in particular types of work will live in income or consumption poverty using national poverty lines rather than the USD1.25 a day measure. The chapter draws on case studies from the Project on Poverty Reduction and Policy Regimes as well as the following background papers:

This chapter examines the causes, patterns and dynamics of wealth and income inequalities. It looks at: inequality and structural change, data on social protection regimes; inequality and the functional distribution of income and wealth; global macroeconomics and the movement of inequality; and inequality, poverty and the poverty-reduction elasticity of economic growth. The chapter will draw on the papers on inequality commissioned as part of each of the case studies for this project as well as the following papers:

Olivier Giovannoni (University of Texas at Austin, US) – Functional distribution of income and the incidence of poverty.

3. Gender inequalities

Conceptually the links between growth, employment and poverty reduction must be understood along with their gender dimensions. Methodologically, this requires an approach that combines household analysis of poverty with intra-household and individual poverty rates. Institutionally gender segmentations (horizontal and vertical) of labour markets, both formal and informal, are central to understanding the gendered connections between growth, employment and poverty. Despite the feminization of the labour force which was predicted to improve women’s relative wages, gender inequalities have persisted and remain endemic. In addition to labour markets (and labour-based income), tax and transfer systems, are also very important for understanding gender differences in poverty. The chapter highlights differences across countries in the degree of gender-progressiveness of tax-and-transfer systems, and whether/how the differences across countries can be explained in terms of welfare state regimes. Supporting papers include:

Janet Gornick (Baruch College and City University of New York, US) and Markus Jäntti (Abo Akademi University, Finland) – Pre- and Post-transfer Poverty by Gender: Evidence from the Luxembourg Income Study data.

James Heintz (University of Massachusetts, US) – The employment and poverty connection: Gender-disaggregated data analysis for six countries.

4. Ethnic and Spatial Inequalities

This chapter explores the impact of different development strategies and growth processes on ethnic and spatial inequalities in multi-ethnic countries. The chapter analyzes how a number factors, including differing paths of historical development or growth strategies, changes in migratory and settlement patterns, discriminatory public policies, and variations in the international political and economic environment, have a bearing on poverty reduction. Three papers have been commissioned to assist in the preparation of the chapter: